Why 64 Percent Is the Golden Mean in the Housing Market: View

June 1 (Bloomberg) -- Who should own a home? From the late1960s to the mid-1990s, the answer in the U.S. was surprisinglyconsistent. Homeowners were savers who could muster significantdown payments, with incomes solid enough to enable them to startrepaying mortgages right away. During war, peace, boom times andrecessions, the national rate of home ownership remained steadyat 64 to 65 percent of households.

Starting in 1995, a home-ownership craze began. The belieftook hold that rising home ownership meant a better society, nomatter how fragile new buyers’ finances might be. Down paymentsstarted to matter much less; the same was true of income, whichcame to be ignored through no-documentation "liars’ loans." Bylate 2004, a record 69.2 percent of American households ownedtheir homes.